The Nigerian National Petroleum Corporation has said that it has reduced the cost of crude oil production to U.S.$23 per barrel from U.S.$78 per barrel as of August 2015.
The reduction, the corporation said, represents a 70.5 per cent fall.
A statement Wednesday by Ndu Ughamadu, NNPC spokesperson, quoted Dafe Sejebor, Group General Manager, National Petroleum Investment Management Services, NAPIMS, as making the revelation during the inauguration of the anti-corruption committee of the unit.
Mr. Sejebor added that the country had saved a minimum of $3 billion per annum.
According to him, NAPIMS arrived at the figure after looking at the difference between the $78 and $23, representing the old and new cost of production in relation to the current daily average production in the country.
"If you knock down your cost of production from $ 78 per barrel to $ 23 , take the difference and multiply by the average daily production, you will discover that we are saving a minimum of $ 3bn in the upstream for both Production Sharing Contracts and Joint Ventures," he said.
He said the target was to bring the cost of production to $17 and $19 for onshore and offshore production, respectively.
The NAPIMS boss also commended the Nigerian government for its support to the NNPC management in tackling the challenges in the petroleum industry, making specific reference to the cash call exit agreement signed in 2016 and the reduction of contracting circle from three years to six months.
Mr. Sejebor explained that the new petroleum policy was necessitated by the increasing difficulty in operating the petroleum industry within the framework of the old Petroleum Act in the face of the delayed passage of the Petroleum Industry Bill.
He, however, noted that the policy would restore investors' confidence in the industry pending the full passage of the entire PIB by the National Assembly.
Speaking on the NAPIMS anti-corruption committee, he urged the management and members of staff to let the principles of accountability, integrity , honesty and transparency be their watchword.
He charged them to generate positive ideas to help tackle the challenges facing the industry.
The establishment of NAPIMS's anti-corruption committee followed a directive given recently by the Group Managing Director , NNPC , Maikanti Baru, mandating all the Strategic Business Units and Corporate Service Units to establish their own anti-corruption committees.